Sodexo, which is the world’s No.2 catering services company after Britain’s Compass Group, said it was nevertheless confident it could achieve its full year targets.

“We are confident about a pick-up in growth that will accelerate in the coming months,” Chief Executive Michel Landel told a conference call.

Sodexo manages canteens and facilities for office workers, armed forces, schools, hospitals and prisons, and also supplies vouchers for meals and gifts. Its clients range from the Royal Ascot Racecourse in England to the U.S. Marine Corps.

Its first quarter performance was impacted by weakness at its food service business in North American schools and universities and by tough economic conditions in Brazil, which weighed on the vouchers division.

Revenues of 5.312 billion euros ($6.35 billion) in the three months to November 30 marked a decline of 2.6 percent from the previous year, due to a lower U.S. dollar and Brazilian Real currency.

Sodexo kept its forecast for revenue growth of between 2-4 percent and a flat operating margin at 6.5 percent of sales for the full year ending August 31, 2018, when excluding acquisitions and currency. SHARES FALL The shares were down 2.6 percent at 107.45 euros in early session trading - the worst performing stock on France’s benchmark CAC-40 index.

“Sodexo’s valuation is expensive given its weak growth profile with lower organic and EPS (earnings per share) growth than its peers,” said Berenberg analysts in a note.

“We remain sellers with a price target of 92 euros. In the space, we continue to prefer Compass,” they added.

Sodexo trades at 19.5 times its estimated full year earnings, above the average 17.9 times for the sector.

Sodexo, which bought a majority stake in FoodCheri - a French start-up delivering fresh meals in the Paris area - said its pipeline for new contracts was good and revenue should progressively improve in the coming quarters.

Landel saw good signs for the future from areas such as the French tourism sector, which is recovering after several Islamist attacks over 2015-2016.

He also saw positive signs from robust growth in the energy sector, where Sodexo provides services on oil and gas platforms and mining sites, and in the Asian and Latin American markets.

Earlier this week Sodexo signed a global partnership deal with Huawei, in the latest major Chinese contract for a French blue-chip company struck during President Emmanuel Macron’s trip to China.

Sodexo’s veteran Chief Executive Michel Landel will retire at its annual shareholders meeting on January 23, 2018. He will be replaced by digital boss Denis Machuel, who became a deputy CEO in September 2017 working alongside Landel.